Wednesday, November 17, 2010

I just spent over an hour watching Tim O'Reilly and John Battelle interview Mark Zuckerberg at the Web 2.0 Summit 2010. It was absolutely fascinating. Just watching Zuckerberg, it's so interesting to see how really smart the guy is. His eyes are so open, you can see the wheels turning in his head. But the interviewers are really smart, too, and asked great questions.

If you're an entrepreneur, it's worth the time to watch this interview, if only to hear Mark say over and over that the future will "come down to really excellent entrepreneurs with vision." Or "We'll get value proportional to what we put in." Hear Mark talk about the social graph and how that will be driving the future or how he believes in an open platform. He also pointed out that the technology industry is not a zero-sum game. Rather, there's plenty of uncharted territory where companies can build value, essentially expanding the map of possibilities.

He had another piece of really good advice -- focus on the couple of things that really matter. That's something all entrepreneurs need to keep in mind, if they want to be successful.

My favorite comments came from Battelle, however: "Facebook doesn't ask for permission. It asks for forgiveness." And "Fair is where you end up."

No doubt you've heard of microfinance. It's the social entrepreneurial business of giving tiny loans to very poor people (usually women) to seed small enterprise. The women can use the money to make clothes, cloth, food, crafts or other items and sell them. This also seeds capitalism in non-capitalistic countries, enables the women to escape abusive husbands and to become literate. It empowers the women to send their children to school and to help other women start their own businesses. It pulls whole families and villages out of grinding poverty.

Nicholas Kristof, writing in the New York Times, said that seeding such businesses in places like Pakistan actually fights terrorism. I believe he is correct. He also said that microfinance has been more successful in Asia than Africa. Interesting. The founder of the microfinance agency Kristof wrote about was founded by Wharton undergraduate alumna Roshaneh Zafar. (I got my MBA from Wharton, so this is exciting to me.)

Monday, November 8, 2010

Last week a friend of mine said her long-term care insurance premiums had suddenly gone up by 39%. When she called her insurance company to see if this was a mistake, their answer was "no." It seems that people were beginning to actually make some claims and use the benefits of the insurance. Well, that suddenly hurt profits, so MetLife (the company in question) asked the State of Connecticut if they could raise their rates. The state said "yes." This is happening all over the country.

Shortly after I had this conversation, I read an article in the New York Times on the sudden increase in long-term care insurance premiums. Obamacare was partly to blame (due to several new regulations buried in the law). But there were other factors, too. It seems baby boomers aren't buying the insurance. In fact, sales are flat to down. Why? Some answers were in the Times article and others in a report by Milliman (an insurance consulting company).

Most people realize that our government indemnifies most of us from the catastrophic costs of a nursing home, home-health care or assisted living through Medicaid. You don't even have to give up your house, car or personal possession to qualify for Medicaid (in most states). The vast majority of older Americans qualify because they don't have a lot of savings and investments outside their homes. And those that do, have figured out ways to protect their estates.

In addition, the chances of needing the care are not as great as one would think. For people over 65, there is only a 45% chance that you'll make a claim. Not only that, only 14% of people stay in a nursing home more than three years.

So, if you can afford to pay $83,500 or more a year on a nursing home for three years, buying the insurance might not make sense. Long-term care insurance can cost $2,500 per year for a 60-year-old. But if rates continue climbing at 40% per year, that could be a lot of money to give up for a 45% chance you'll need it when you're in your 80s. Even if you do, the insurance may not pay all the bills.

The NY Times article and the study by Milliman give many more facts, opinions and food for thought. They are both worth reading prior to making any decisions about buying long-term care insurance. When looking at long-term care coverage, see how much they will pay out and for how long. Weigh the costs and benefits for yourself. Would your premiums earn you more if invested in stocks or bonds?

Thursday, November 4, 2010

I'm diverting from writing about business because I just finished a fantastic crime novel -- "The Reversal" by Michael Connelly. I think all business people should take time to read for fun.

I am a huge Michael Connelly fan. Whenever I finish one of his books, I look forward to the next one. I used to live in LA and really miss the city. So I particularly love his dark descriptions of Los Angeles and its seamy underworld of sordid crimes, cops and criminal attorneys. I've grown very fond of his characters L.A.P.D. Detective Harry Bosch and defense attorney Mickey Haller, who Connelly developed in separate series of novels over the course of many years.

In "The Reversal", Connelly brings the two men together to nail a kidnapper and murderer. I'm not going to reveal the plot; it's best to read it for yourself. In most detective novels, the reader has to guess who committed the crime. That is not the point of this book. Rather, it's a story of how two prosecutors and a police detective work to find evidence to nail the bad guy. The unfolding of how Harry and Mickey work and think is really fascinating. Their characters' parallel lives with divorces, daughters and homes with sweeping views of Los Angeles (Mickey's looks West to the ocean. Harry's looks northeast (I think) over the Cahuenga pass and the Hollywood Freeway) pull you into the story and make you care.

Amazingly, the court room scenes of the murder trial are fast-paced and fascinating. And wondering what the bad guy will do next kept me reading past my normal bedtime.

Trust me. This is great escapist reading, grounded in a real city with characters you'll believe are real. That's what makes this book great.

About Me

Owner of Upstart Business Planning: I craft business plans that answer the questions investors ask most often. Co-Author of The Purpose Is Profit: The Truth about Starting and Building Your Own Business and The Startup Roadmap: 21 Steps to Profitability"

Only 1 - 2% of business plans raise funding. 60% of the plans I've done have helped owners raise capital.

I was a founder of and former board member of At Home In Darien (formerly Aging in Place+Gallivant), a nonprofit in Darien, CT.
* MBA from Wharton in Marketing and Finance.